"...the subject which will be of most importance politically is Mass Psychology. ... The populace will not be allowed to know how its convictions were generated. ... As yet there is only one country which has succeeded in creating this politician’s paradise.” - Bertrand Russell, The Impact of Science on Society, 1960.

Sunday, May 31, 2009

Carlyle to Pay $20 Million to Resolve Cuomo Probe

By Karen FreifeldJune 1, 2009

May 14 (Bloomberg) -- Carlyle Group agreed to end “pay to play” tactics in its public pension fund business and pay $20 million to resolve a corruption probe by New York Attorney General Andrew Cuomo.

Under the agreement, Carlyle will adopt new a public pension fund “code of conduct,” which bans investment firms from using placement agents or other third parties to negotiate with public pension funds to obtain investments. It also prohibits firms from doing business with a public pension fund for two years after the firm or its employees make a campaign contribution to a public official who can influence the fund’s investment decisions.

“By banning campaign contributions to those who have sway over pension funds and eliminating the third-party intermediaries that have become dens of corruption, we will ensure reform,” Cuomo said in a statement. “I commend Carlyle for being the first to embrace the Reform Code and leading the industry toward critical change of the public pension investment system.”

Carlyle executives will not be subject to any criminal liability, Cuomo said at a press conference. Carlyle is the second-biggest private equity firm after New York-based Blackstone Group LP. Founded by David Rubenstein with William Conway and Daniel D’Aniello in 1987, it manages about $85.5 billion in assets. ...